Debt consolidation in Australia

DEBT CONSOLIDATION

You don't need to own property to be able to consolidate your loans.

Consolidating loans with your existing mortgage is very effective if you owe large amount of money on your credit cards, personal loans, car loans, etc. See the Example-1 on our home page.

Australian debt problems

Australian consumers are the most indebted in the world. High standards of living create high debt levels by default.

Thirty years ago, an average income earner in Australia had significantly less financial problems in comparison to today. On average, debt from an Australian household was less than 40% of their net income. A household with an income of $20,000 would have less than $8,000 of debt. Today, when a person has this type of income to debt ratio, we may say he or she is financially sound. Not many Australians belong to this group. Currently, Australians have the highest debt to net income in the world, over 150%. This means a person with a net annual income of $60,000, owes $90,000 on their loans and credit cards. The pressure is on, and sooner or later something will have to give, creating, once again, heavy consequences.

The constant rise in debt consolidation applications is serves to confirm the financial pressure experienced by most consumers in Australia.

The latest research from Dun & Bradstreet, a credit reporting and debt collection agency, shows a rise in bankruptcies. There was a 50% rise in the 2009-2010 financial year compared to 2 years ago. In the last two years utility bill debt has risen by 50% along with a telecommunications debt rise of 41%. Young people tend to have proportionally higher debts than those in the mature age group.

The majority of people with financial defaults on their credit files assume that they will be able to consolidate loans and bills even with bad credit history. This type of loan consolidation is very difficult to do, and, more than likely, a debt agreement will be the most appropriate solution in this situation. Although, not a debt consolidation per se, debt agreements enable people with finance defaults to reorganise their loans repayments to a more manageable level. If this option is not taken, in order to avoid sinking deeper into financial difficulties, often the next step is a bankruptcy.

Paying bills on time, avoiding buying unnecessary items and budgeting money will result in a healthy financial position.